A plan to save Europe: Pay every EU citizen a ‘Eurodividend’

Unthinkable: Finland has piloted a basic income scheme; could the EU follow suit?

A Europe-wide basic income ‘would provide our national welfare states with a common floor’. Photograph: Chris Ratcliffe/Bloomberg

The idea of providing an unconditional basic income to every citizen “used to be regarded as the fantasy of a handful of lunatics,” Philippe Van Parijs and Yannick Vanderborght observe in a new book on the subject.

But support for the measure is growing with a rising number of economists and politicians seeing merit in the scheme as a way of dealing with anticipated massive job losses through technological displacement and existing evils of precarious work and income inequality.

Echoing the thinking of basic income advocates, former US president Barack Obamaearlier this year called for “a reorganisation of the social compact. That requires that we change our mindset about the link between work, income and the value of people...” However, the concept has been plagued with doubts about practicality and cost to the public purse. A basic income scheme might work in theory, sceptics say, but would it work in practice?

Van Parijs and Vanderborght seek to address those doubts in Basic Income: A Radical Proposal for a Free Society and a Sane Economy (Harvard University Press).

A basic income builds on the abolition of slavery by giving people the real freedom to turn down unattractive or degrading work

As well as exploring how you could fund the scheme - which would replace existing unemployment benefit with a living income that people would be free to top-up through engagement in the jobs market - the duo highlight obstacles that liberal proponents might prefer to ignore. These include applying border controls on both capital and citizenship. “The sustainability of (genuine) domestic redistribution imposes firm limits on hospitality,” they write.

In January, Finland became the first European country to introduce the scheme under a pilot project, which will track the progress of 2,000 unemployed Finns over two years.

But Van Parijs and Vanderborght believe EU member states should be more ambitious, and they boldly advocate the introduction of a “Eurodividend” - an income that would be paid to every citizen in the EU (or initially at least the Eurozone) at a level based on the average cost of living in each state. One might think the EU has enough on its hands without embarking on such an ambitious project but Van Parijs - this week’s ‘Unthinkable’ guest - suggests a Eurodividend could be the key to the EU’s survival.

What would be the benefit of an EU-wide basic income?

Philippe Van Parijs: “A Eurodividend would perform four functions. It would provide the euro with a macroeconomic stabiliser that would buffer asymmetric shocks and trends. It would provide the Schengen area with a demographic stabiliser that will reduce the tensions arising from intra-EU migration.

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“It would provide our national welfare states with a common floor that would help them preserve their generosity and diversity. And it would make more tangible to the ‘stay-at-homes’ that the EU is looking after their material interests too, not only those of the ‘movers’.”

To introduce such a scheme would one need to harmonise tax rates, and especially corporation tax?

“The sustainability of any redistributive system that goes beyond mere insurance requires the appropriate taxation of those people who appropriate a growing share of our countries’ primary income: the owners of capital, of intellectual property rights and of highly lucrative skills. Increasing transnational mobility, both real and virtual, makes it more difficult to tax their incomes at a fair level.

“A systematic international sharing of fiscal information will help. So will the adoption by the EU of a common definition of the tax base of the corporation tax, the imposition of a minimum rate and, even more, the Europeanisation of at least part of the corporation tax.”

Would a Eurodividend - or indeed any basic income scheme - also require controls on immigration?

“Whether adopted at the national, sub-national or supra-national level, no redistributive scheme that goes significantly beyond insurance can survive with fully open external borders that allow any newcomer to enjoy straight away the full benefit of the scheme. This holds for an unconditional basic income, but also for means-tested social assistance and for in-work benefits.”

What’s the biggest obstacle to the introduction of a global basic income scheme? Is it globalisation itself?

“Globalisation, understood as the increasing transnational mobility of capital, goods, services and people, constitutes a major challenge to any generous and genuine national redistributive scheme, for three reasons.

“As mentioned earlier, it makes such a scheme more vulnerable to the selective immigration of potential net beneficiaries. In addition, it makes it more vulnerable to the selective emigration of net contributors. And it increases the cultural heterogeneity of the population, thereby weakening the spontaneous solidarity of the more advantaged with the less advantaged, while also weakening the capacity of the less advantaged to mobilise together in order to fight for their interests.

“The first two aspects of the challenge could be addressed by organising the scheme on a scale higher than the national one - at the European or world level - though at the cost of further increasing heterogeneity, and thereby worsening the third aspect of the challenge. There is no simple solution to this dilemma. But there is also no other strategy that trying to progress at each level whenever there is an opportunity. And progress at a more decentralised level will help progress at a more centralised one, and conversely.”

You place the struggle for universal basic income in the context of previous fights for universal suffrage and against slavery. Do you think future generations will look back and wonder why we left people imprisoned by work for so long?

“Yes I do. A basic income builds on the abolition of slavery by adding to the formal freedom to turn down unattractive or degrading work the real freedom to do so. It is also analogous to universal suffrage in giving everyone a modicum of economic power - bargaining power, not just purchasing power - just as universal suffrage gave everyone a modicum of political power.

“In a past that is not that remote, the majority of the population could not even imagine a society in which no one would be born in slavery. Even more recently, most people found it natural that only a fraction of the adult population could vote. An unconditional income is no more utopian than those two other major steps in the progress of civilization and, once made, will seem just as self-evident.”

* The Basic Income Ireland annual forum takes place on Saturday, September 16th at the Carmelite Community Centre, Aungier Street, Dublin where film director Gerry Stembridge will be among the speakers. www.basicincomeireland.com

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Ask a sage:

Question: How much is enough?

Jean-Jacques Rousseau replies: “The money that one possesses is the instrument of freedom; that which one strives to obtain is the instrument of slavery.”